My favorite Bloomberg writer, Oshrat Carmel, reports that NYC apartment owners are slowing sales with their dreams of 40% returns.
Some Manhattan apartment owners trying to sell their homes have big dreams these days: They’re seeking about 40 percent more than they paid for the properties, even if they were bought within the past five years.
This year through September, sellers listing apartments priced at $3 million or less that were bought in 2010 sought a median of 47 percent more than their purchase price, data compiled by StreetEasy show. Owners who bought in 2011 have returned homes to the market for a median 42 percent markup, and buyers from 2012 listed for 35 percent more, according to the real estate website.
“That detachment from the market, from what the value actually is, is a big part of why sales are down,” said Jonathan Miller, president of appraiser Miller Samuel Inc.
The ambitious pricing, which took hold when Manhattan was starved for non-luxury listings, is bumping up against a new reality. As the inventory of sub-$3 million apartments gets replenished, sellers are sticking to their lofty expectations while buyers with more to choose from are refusing to bite. That disconnect is hobbling sales of previously owned homes in the borough, which plunged 20 percent in the third quarter from a year earlier, according to Miller Samuel and brokerage Douglas Elliman Real Estate.
“In my experience, it takes sellers a good one to two and a half years to believe in the new market,” Miller said. “The buyers are with the program immediately.”
Growth in actual transaction prices hasn’t matched sellers’ aspirations. The median for all Manhattan resales in the third quarter was $950,000, or 11 percent more than in the same period of 2011, according to Miller Samuel.
“If it’s a unique property, you may just get lucky and find that one buyer,” said Rachel Altschuler, a broker with Douglas Elliman. “Of course, every seller thinks theirs is the most most unique, amazing property on the market, so you have to be prepared to say the things they don’t want to hear.”
Altschuler advises current clients to list their apartments for 3 to 5 percent below the market value, as a way to attract the widest pool of buyers and possibly spark a bidding war. Though finding the right price in a slowing resale market can be its own challenge since comparable deals completed six months ago may not be an accurate guide, she said.
“There’s a conversation to be had between buyer and seller -- as long as you’re not offensively overpriced,” said Scott Harris, a broker with Brown Harris Stevens. “People are willing to make an offer, but the mentality is, if it’s so overpriced, the seller is not serious.”
Some owners have more leverage to push pricing. One-bedroom homes costing less than $1.2 million are “flying off the shelf,” said Altschuler of Douglas Elliman. Apartments that don’t need renovations, especially on the Upper West Side -- a neighborhood popular with families -- are also faring well, said Harris, who recently sold a two-bedroom duplex on West 81st Street above the $2.395 million asking price. And “if you own a studio in the West Village, you can name your price,” Corcoran Group broker Brian Meiersaid.
But those aren’t the rule in Manhattan as a whole, where buyers aren’t feeling the urgency they once did. ...
Sounds very much like Greenwich a few years ago; our homeowners have had more time to come down to earth, and many have. Many, but not all.
As an aside, brokers who say things like "if you own a studio in the West Village you can name your price" just slay me. My father sold his 4-story brownstone at 233 W. 11th Street back in 1954 when he moved us out to Riverside, and when I asked him, way back in 1968 or so, why he didn't keep it, he replied "who wants to be a landlord in New York City?" Even at the young age of 15, even with Fun City in full bloom, I knew my answer and replied "I do!"
I'm still working for a living, alas